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Marian Morgan heads to trial

Published: Monday, September 5, 2011 at 7:02 p.m.

Last Modified: Monday, September 5, 2011 at 7:02 p.m.

When Marian Morgan's trial starts today in Tampa, it will mark the beginning of the end of a series of high-profile Ponzi cases that originated in Southwest Florida during the boom years, and ended with the credit collapse that followed.

While perhaps not as prominent as those of Arthur Nadel and his Scoop Management or Beau Diamond and his Diamond Ventures, the wind-down of Marian and John Morgan's alleged Ponzi scheme covered much more ground, meandering in various ways from Sarasota to Switzerland to Denmark and Sri Lanka.

It seems likely to differentiate itself in another way, with Marian Morgan poised to take the stand in her own defense. John Morgan already has signed a plea deal that could have him answering prosecutors' questions about the couple's scheme in the rebuttal phase of the month-long trial.

Until their financial world and that of their investors collapsed in 2009, the Morgans lived the good life in the Sarasota bayfront mansion they owned on Periwinkle Drive. They drove a Jaguar and kept a $100,000 power boat out back.

On Friday, dressed in jail garb and wearing shackles on her ankles, Marian Morgan told the judge that she knows what she is doing. Her likely appearance on the stand is part of an all-out effort to avoid a prison term that could consume the rest of her life.

Out of the $27 million the Morgans collected from investors, they gave back about $13 million, which made it look to investors like their high-yield program was working, according to the plea deal John Morgan signed this summer.

David E. Jones, a Naples air conditioning contractor who lost his life savings of $270,000, does not expect to see any more of that money.

Marian Morgan, who will turn 58 years old on Sept. 21, will be staring down a number of similar investors during her trial.

While no witness list has yet been made public, the Herald-Tribune has determined that at least two Canadian investors, a Colorado pig farmer and a California speech pathologist, are on tap.

The prosecution's two-week presentation will also include testimony by agents of the FBI and the Internal Revenue Service and law enforcement officials from Denmark, where the Morgans allegedly sent investors' money only to have it returned to their own private U.S. accounts.

Marian Morgan faces 21 felony counts. On top of wire fraud, money laundering and conspiracy, she is accused of fraudulently omitting $7 million from her joint tax returns with John Morgan from 2005-07.

It was mostly in those years that the couple drew investors to Morgan European Holdings, promising yields ranging from 30-70 percent per month.

When a wide variety of high-yield financial schemes fell apart in late 2008 and early 2009, Sarasota turned out to be the home base for three that became the subjects of federal criminal indictments.

If Marian Morgan does testify, it will be the first time investors in a local Ponzi scheme have heard from the alleged perpetrator in court.

Nadel, whose Scoop Management raised more than $330 million from 390 investors, pleaded guilty in February 2010 to 15 federal courts and was sentenced to 15 years in prison.

Last summer, Diamond was tried and convicted in Tampa federal court after he took in $37 million from 200 investors and illegally pocketed at least $7 million.

In the same imposing Tampa federal courthouse where Morgan will be tried, Diamond chose not to testify, and was convicted on all 18 felony counts against him. He is now appealing a 15-year sentence he is serving at a low-security Miami prison.

By testifying, Morgan could open herself up to a difficult cross-examination by federal prosecutors, who have a litany of emailed correspondence between the alleged Ponzi schemer and investors.

"They cannot serve us in Europe," she wrote to investors in summer 2009, after leaving the country rather than face a civil case brought by the U.S. Securities and Exchange Commission.

In another letter, Morgan advised, "you might get a form letter asking to verify the reason for these funds. Please do not say you are with MEH. Simply say you are a friend of Marian and John and they were simply returning money to you that you had loaned to them."

John Morgan's 27-page plea deal includes a long recitation of facts. Though he will not have to testify directly against his wife, the arrangement calls for him to cooperate in all other ways. The government is not precluded from calling him to the stand to testify just before the jury begins deliberation, during the so-called rebuttal phase.

The indictment also names as co-conspirators and defendants both Stephen Bowman, an Omaha promoter who funneled the bulk of the Morgan's U.S. investor money to them, and the couple's Danish attorney Eli Heckscher.

Bowman's testimony would reinforce the prosecution's theory that the Morgans collected most of their money through a network of people who had the most direct contact with investors.

Heckscher has not been extradited, but by bringing in testimony from Danish law enforcement agents, the government will reinforce the money-laundering part of their case. Heckscher is supposed to have kept investors' money safely in escrow accounts at European banks.

"This money was supposed to be in a lockbox and it took five signatures to get it out," said John Long, a Colorado pig farmer who will be a key prosecution witness connecting Bowman to the Morgans. "If nothing happened in 90 days, I could take my money out of the lockbox and move on with my life."

But instead, the indictment and John Morgan's plea show that Heckscher wired millions back to the Morgans.

The federal probe of the Morgans started with civil fraud charges in June 2009.

They were given a short time to come up with an accounting of their high-yield venture and to show a judge that they could return the money to investors.

When they failed to do so, the judge ordered them to answer a possible contempt charge. Instead, the Morgans flew to Switzerland. In fall 2009, they were arrested on an unrelated charge trying to enter Sri Lanka. By December, they were back in the U.S. and being held at the Pinellas County jail.

Long, who had been urging federal authorities to investigate the Morgans and Bowman since 2007, lost $500,000.

"As an investor and as a witness, I want Marian afforded the complete array of due process, so when the decision comes down, there is no wiggle room," he said.

<p>When Marian Morgan's trial starts today in Tampa, it will mark the beginning of the end of a series of high-profile Ponzi cases that originated in Southwest Florida during the boom years, and ended with the credit collapse that followed.</p><p>While perhaps not as prominent as those of Arthur Nadel and his Scoop Management or Beau Diamond and his Diamond Ventures, the wind-down of Marian and John Morgan's alleged Ponzi scheme covered much more ground, meandering in various ways from Sarasota to Switzerland to Denmark and Sri Lanka.</p><p>It seems likely to differentiate itself in another way, with Marian Morgan poised to take the stand in her own defense. John Morgan already has signed a plea deal that could have him answering prosecutors' questions about the couple's scheme in the rebuttal phase of the month-long trial.</p><p>Until their financial world and that of their investors collapsed in 2009, the Morgans lived the good life in the Sarasota bayfront mansion they owned on Periwinkle Drive. They drove a Jaguar and kept a $100,000 power boat out back.</p><p>On Friday, dressed in jail garb and wearing shackles on her ankles, Marian Morgan told the judge that she knows what she is doing. Her likely appearance on the stand is part of an all-out effort to avoid a prison term that could consume the rest of her life.</p><p>Out of the $27 million the Morgans collected from investors, they gave back about $13 million, which made it look to investors like their high-yield program was working, according to the plea deal John Morgan signed this summer.</p><p>David E. Jones, a Naples air conditioning contractor who lost his life savings of $270,000, does not expect to see any more of that money.</p><p>"Dreams of grandeur, returns, blah, blah, blah," said Jones. "It cost me everything I had. It cost me probably 10 years of my life, these people did."</p><p>Marian Morgan, who will turn 58 years old on Sept. 21, will be staring down a number of similar investors during her trial.</p><p>While no witness list has yet been made public, the Herald-Tribune has determined that at least two Canadian investors, a Colorado pig farmer and a California speech pathologist, are on tap.</p><p>The prosecution's two-week presentation will also include testimony by agents of the FBI and the Internal Revenue Service and law enforcement officials from Denmark, where the Morgans allegedly sent investors' money only to have it returned to their own private U.S. accounts.</p><p>Marian Morgan faces 21 felony counts. On top of wire fraud, money laundering and conspiracy, she is accused of fraudulently omitting $7 million from her joint tax returns with John Morgan from 2005-07.</p><p>It was mostly in those years that the couple drew investors to Morgan European Holdings, promising yields ranging from 30-70 percent per month.</p><p>When a wide variety of high-yield financial schemes fell apart in late 2008 and early 2009, Sarasota turned out to be the home base for three that became the subjects of federal criminal indictments.</p><p>If Marian Morgan does testify, it will be the first time investors in a local Ponzi scheme have heard from the alleged perpetrator in court.</p><p>Nadel, whose Scoop Management raised more than $330 million from 390 investors, pleaded guilty in February 2010 to 15 federal courts and was sentenced to 15 years in prison.</p><p>Last summer, Diamond was tried and convicted in Tampa federal court after he took in $37 million from 200 investors and illegally pocketed at least $7 million.</p><p>In the same imposing Tampa federal courthouse where Morgan will be tried, Diamond chose not to testify, and was convicted on all 18 felony counts against him. He is now appealing a 15-year sentence he is serving at a low-security Miami prison.</p><p>By testifying, Morgan could open herself up to a difficult cross-examination by federal prosecutors, who have a litany of emailed correspondence between the alleged Ponzi schemer and investors.</p><p>"They cannot serve us in Europe," she wrote to investors in summer 2009, after leaving the country rather than face a civil case brought by the U.S. Securities and Exchange Commission.</p><p>In another letter, Morgan advised, "you might get a form letter asking to verify the reason for these funds. Please do not say you are with MEH. Simply say you are a friend of Marian and John and they were simply returning money to you that you had loaned to them."</p><p>John Morgan's 27-page plea deal includes a long recitation of facts. Though he will not have to testify directly against his wife, the arrangement calls for him to cooperate in all other ways. The government is not precluded from calling him to the stand to testify just before the jury begins deliberation, during the so-called rebuttal phase.</p><p>The indictment also names as co-conspirators and defendants both Stephen Bowman, an Omaha promoter who funneled the bulk of the Morgan's U.S. investor money to them, and the couple's Danish attorney Eli Heckscher.</p><p>Bowman's testimony would reinforce the prosecution's theory that the Morgans collected most of their money through a network of people who had the most direct contact with investors. </p><p>Heckscher has not been extradited, but by bringing in testimony from Danish law enforcement agents, the government will reinforce the money-laundering part of their case. Heckscher is supposed to have kept investors' money safely in escrow accounts at European banks.</p><p>"This money was supposed to be in a lockbox and it took five signatures to get it out," said John Long, a Colorado pig farmer who will be a key prosecution witness connecting Bowman to the Morgans. "If nothing happened in 90 days, I could take my money out of the lockbox and move on with my life."</p><p>But instead, the indictment and John Morgan's plea show that Heckscher wired millions back to the Morgans.</p><p>The federal probe of the Morgans started with civil fraud charges in June 2009. </p><p>They were given a short time to come up with an accounting of their high-yield venture and to show a judge that they could return the money to investors.</p><p>When they failed to do so, the judge ordered them to answer a possible contempt charge. Instead, the Morgans flew to Switzerland. In fall 2009, they were arrested on an unrelated charge trying to enter Sri Lanka. By December, they were back in the U.S. and being held at the Pinellas County jail.</p><p>Long, who had been urging federal authorities to investigate the Morgans and Bowman since 2007, lost $500,000.</p><p>"As an investor and as a witness, I want Marian afforded the complete array of due process, so when the decision comes down, there is no wiggle room," he said.</p>